Kenya Airways’ investor hunt obscures return to profitability
By Noel Wandera, June 30, 2025Kenya Airways’ long-awaited return to profitability in 2024 marked a critical point in its turnaround journey, but delays in onboarding a strategic investor continue to cast uncertainty over its next stage of recovery.
As the airline prepares for a media roundtable today, attention is shifting to whether it can translate this financial momentum into long-term stability, particularly in light of a $2 billion capital injection now being sought to recapitalise the business.
The carrier posted a net profit of Ksh5.4 billion for the financial year ended December 31, 2024, its first annual profit since 2013, driven by a 6 per cent rise in revenue to Ksh188.5 billion, improved yields, and foreign exchange gains.
Operational dividends
Operating profit rose to Ksh16.6 billion, up from Ksh10.5 billion in 2023, a sign that Project Kifaru, the airline’s three-phase turnaround plan, is yielding operational dividends.
“We had planned to break even by 2024, but now we have revised that to break even plus make a profit, which we have now delivered. We expect to make a nominal profit this year,” Chief Executive Allan Kilavuka said during a recent investor update.
Despite this strong performance, KQ’s balance sheet remains deeply imbalanced.
As of December 2024, total liabilities stood at Ksh297.4 billion, against assets of Ksh179.1 billion, leaving the airline with a negative equity position of Ksh118.3 billion.
To address this, KQ is seeking to raise up to $2 billion (Ksh258 billion) from a strategic investor, higher than the $1.5 billion previously targeted. The expanded funding will be used to clear legacy debts, restructure lease obligations, support fleet renewal, and unlock long-term growth.
Notably, KQ did not receive any direct financial support from the government in the current 2025/26 fiscal year, marking a significant departure from previous years where the National Treasury injected billions to sustain operations.
Aviation analysts reckon that while the national carrier continues to benefit from state guarantees covering about Ksh58.6 billion in outstanding debt, the absence of a budget line-item for KQ in the latest national budget signals the government’s intent to scale back its fiscal exposure as the airline edges toward commercial viability.
The strategic investor process, however, has fallen behind schedule. Initially set to conclude by early 2025, KQ now expects to finalise investor onboarding by the end of 2025.
Rather than sell its 48.9 per cent government stake, the airline is looking for a partner willing to inject fresh capital without triggering a change in control.
“We are seeking to finalise negotiations with a strategic equity investor,” Kilavuka said during the 2024 half-year update.
Fleet shortages have further slowed progress.
“The delay of all these decisions is due to the acute shortage of aircraft. We are looking for any narrowbodies available, mainly B737s,” Kilavuka explained. In the interim, the airline is relying on short-term leases to maintain operational reliability.
Foreign exchange exposure
Kenya Airways currently operates 36 aircraft, including nine Boeing 787-8 Dreamliners, eight Boeing 737-800s, two Boeing 737 freighters, and 15 Embraer E190s. Its low-cost unit, Jambojet, flies seven Dash 8-Q400s.
Over 70 per cent of the fleet is leased, a structure that continues to weigh on cash flows and heightens foreign exchange exposure.
Potential equity partners include Middle East carriers such as Qatar Airways, Emirates, Etihad, and Saudia.
Qatar, already a stakeholder in RwandAir and IAG, is widely viewed as the most aligned candidate, but Kilavuka has withheld comment, citing ongoing sensitive discussions.
The Treasury, which injected Ksh34.9 billion in FY2023, is now stepping back. Yet with KQ still technically insolvent, further delay in the strategic partnership risks stalling the momentum built in 2024.
As stakeholders gather for Monday’s media roundtable, the key questions are no longer about profitability but about permanence. Will KQ land the right partner?
Will the targeted capital injection materialise in time? Can the airline finally dislodge the weight of legacy debt that continues to threaten its climb?